Most business owners preparing for an M&A exit spend months polishing a five-year strategy document. Here’s the uncomfortable truth: buyers rarely care about the document. What they’re actually evaluating — and what directly affects your valuation multiple — is something far more elusive. It’s called strategizing.
Why Most Mid-Market Companies Don’t Have a Real Strategy
Let me be direct about something I see in almost every sell-side engagement I lead: most companies in the Polish and Central European mid-market don’t operate from a living strategy. They operate on instinct, momentum, and the accumulated judgment of the owner.
And honestly? That’s understandable.
We’re operating in an environment of extraordinary disruption. Russia’s war in Ukraine reshaped European supply chains overnight. New U.S. tariff policies are rippling through manufacturing and trade. Low-cost competition from Southeast Asia and China is eating into margins across sectors from furniture to electronics to business software. In this context, sitting down to write a five-year plan can feel like arranging deck chairs.
A 2024 survey by KPMG found that fewer than 40% of mid-market European companies have a formal, regularly updated strategic plan. The rest operate reactively — responding to market signals, managing by exception, making decisions based on what worked last year.
This is not a moral failure. It’s a rational adaptation to volatility.
The problem is that when you decide to sell — and when a serious buyer walks through your door — this absence of structured strategic thinking becomes immediately visible. And it costs you money.
The Difference Between a Plan and Strategizing
This is the distinction that most M&A advisors don’t make clearly enough, so let me state it plainly.
A strategic plan is a document. It describes where you want to go, how you intend to get there, and what resources you’ll need. It’s static. It reflects the thinking of whoever wrote it, at the time they wrote it. A plan from 2022 is, in most industries, largely fictional today.
Strategizing is a habit. It’s the regular, disciplined practice of asking hard questions about your business — and actually sitting with the answers, even when they’re uncomfortable.
- Why do we make money? Not “because we work hard” — but specifically: which customer segment drives 80% of our margin, and why do they choose us over alternatives?
- What would happen if our largest client left tomorrow? Do we have a real answer, or just a hope?
- Where is our growth leverage? Are we actually using it, or leaving it on the table?
- What has changed in our market in the last six months that we haven’t yet responded to?
I worked with the founder of a SaaS company from Kraków who had no formal strategy document whatsoever. No five-year plan, no McKinsey deck. But in every management meeting — which he held monthly, religiously — he asked two questions: “What is working and why?” and “What would kill us and what are we doing about it?”
When a London-based growth equity fund entered due diligence on his company, they described the strategic clarity of the management team as “exceptional.” The transaction closed at a significant premium to comparable transactions in the Polish SaaS sector that year.
The founder didn’t have a plan. He had a strategizing practice. It showed.
What Buyers Are Actually Evaluating in Your Strategy
When a sophisticated buyer — whether a strategic acquirer or a private equity fund — asks about your strategy during management presentations, they are running three parallel assessments. Understanding these changes how you prepare.
Assessment 1: Does the Business Run on Principles or on the Owner?
This is the most fundamental risk question in any acquisition. A business that depends entirely on the owner’s judgment, relationships, and institutional knowledge is a key man risk that buyers price in aggressively. It reduces your valuation multiple, triggers escrow requirements, and can kill deals entirely.
A living strategy — even an informal one — is evidence that the business has internalized principles. It shows that decisions get made by a logic that can survive the owner’s departure.
If your answer to “how do you decide which markets to enter?” is “I know when the timing is right,” you have a key man problem. If your answer is “we evaluate three criteria: addressable margin, existing relationship density, and integration cost,” you have a principle. Buyers can buy principles. They can’t buy instinct.
Assessment 2: Is Growth Credible or Just Projected?
Every seller presents a growth story. Buyers evaluate whether that story is grounded in actual strategic logic or in optimism.
The signal they look for: does the owner understand why the company has grown? Not just that it has grown — but the specific mechanism. What created the moat? What can be defended? What can be scaled with capital?
A seller who says “we’ve grown 25% year-on-year for four years because SME clients in our sector are systematically underserved and we have a 6-week implementation timeline versus the 6-month industry average” is telling a compelling, defensible story.
A seller who says “we’ve always found good clients and we deliver quality” is describing luck and goodwill. That’s not a bad business — but it’s a harder one to price confidently.
Assessment 3: Is the Management Team Capable of Executing the Next Chapter?
Post-acquisition, buyers need confidence that the management team can execute. Not just continue what exists — but adapt, grow, and respond to the inevitable unexpected challenges.
The clearest signal of this capability is how the team talks about the future. Teams that have practiced strategizing — that regularly ask hard questions, stress-test assumptions, and update their thinking — demonstrate this capability naturally.
Teams that have only ever had a document to point to tend to fall back on the document. And when buyers push on assumptions, the answers get thin quickly.
The Four Most Common Strategic Preparation Mistakes Before an M&A Exit
In my years advising sell-side transactions, I see the same four mistakes repeatedly. Each one is preventable with a minimum of 12 months of preparation.
Mistake 1: Confusing Revenue Growth with Strategic Clarity
A growing top line is not a strategy. It’s evidence that something is working — but “something” is not a sufficient answer for a sophisticated buyer. Sellers who can’t decompose their growth into specific mechanisms (product-market fit, sales motion, customer retention dynamics, competitive differentiation) leave valuation on the table because buyers apply a higher risk premium to unexplained success.
Mistake 2: Leaving the Strategy in the Owner’s Head
I’ve sat in management presentations where the owner delivered a brilliant, crisp, strategically coherent narrative — and the CFO and commercial director next to them had never heard half of it. This is a disaster in due diligence. When buyers interview management separately (and they always do), inconsistent strategic narratives create serious credibility problems.
The fix is simple but requires discipline: the strategy needs to be spoken aloud, repeatedly, in internal meetings, until every senior leader can articulate it independently.
Mistake 3: Building a Strategy Deck for the Sale, Not for the Business
There’s a category of document I call the “exit PowerPoint” — a beautiful 40-slide deck prepared specifically for the M&A process, full of ambitious projections and strategic frameworks that bear no relationship to how the company actually makes decisions.
Experienced buyers see through this within hours. They compare the deck to management accounts, interview the team, and probe the operational decisions of the last 24 months. When there’s a gap between the exit deck and the operational reality, trust erodes and negotiations get difficult.
Mistake 4: Waiting Until You’re Ready to Sell to Start Strategizing
Strategic clarity isn’t something you can manufacture in six weeks before a process launch. It’s the accumulation of a habit. Buyers can feel the difference between a team that has been asking hard questions for three years and a team that started preparing answers three months ago.
The minimum runway for meaningful strategic preparation before an M&A exit is 12 to 18 months. Ideally longer.
What to Do Now: Building a Strategizing Practice
If you’re considering selling your business in the next two to three years, here’s a practical framework for building the habit that will actually move your valuation.
Monthly: the two hard questions. In every management meeting, reserve 20 minutes for two questions: “What is driving our performance and why?” and “What could materially damage the business and what are we doing about it?” Document the answers. Review them quarterly.
Quarterly: the outside view. Once per quarter, force yourself to look at your business through a buyer’s eyes. Ask: if I were paying 7x EBITDA for this company, what would make me nervous? Then either address the source of nervousness or build a coherent response to it.
Annually: the strategic narrative. Once per year, write one page — not a deck, one page — that answers three questions: why does this business make money, what is the path to meaningfully more of it, and what would stop us. Share this with your senior team. Test their understanding. Refine it based on pushback.
Before the process: war-gaming. Six to twelve months before you expect to launch an M&A process, engage an advisor for a pre-sale review. Go through the questions a buyer will ask. Identify the gaps. Close them before the process starts, not during.
The companies that command the highest multiples in mid-market M&A transactions are rarely the ones with the most elaborate strategic plans. They’re the ones whose management teams have internalized the discipline of asking hard questions — and can answer them fluently, consistently, without opening a laptop.
If you’re considering selling your business in the next 2-3 years, I offer a free 60-minute strategic conversation to help you understand where you stand and what would move your valuation. The questions I ask are the same ones a serious buyer will ask. Better to hear them from me first.
Key Takeaways
- Most mid-market companies don’t have a living strategy — they have a document, or nothing at all
- In an M&A context, buyers evaluate strategizing as a practice, not strategic planning as a document
- The three buyer assessments: key man risk, credibility of growth story, management execution capability
- Strategic clarity cannot be manufactured for a sale — it requires 12-18 months of consistent practice
- The one-page annual strategic narrative is more valuable than a 40-slide exit deck
Łukasz Brzyski is a sell-side M&A transaction advisor based in Kraków, Poland, specializing in mid-market transactions for Polish and Central European companies. He advises business owners through the full transaction lifecycle — from pre-sale preparation through SPA negotiation and closing.